OTIS T. BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES, PETITIONER
V. JEANNE A. JORDAN, ET AL.
No. 87-245
In The Supreme Court Of The United States
October Term, 1987
The Solicitor General, on behalf of the Secretary of Health and
Human Services, respectfully petitions for a writ of certiorari to
review the judgment of the United States Court of Appeals for the
Tenth Circuit in this case.
Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Tenth Circuit
II
PARTIES TO THE PROCEEDINGS
The named respondent, Jeanne A. Jordan, is the representative of a
nationwide class of all recipients of benefits under Title II or Title
XVI of the Social Security Act whose benefits are or have been paid to
a representative payee at any time on or after the filing of this
action (App. 21a). Appellee Barbara Leeds was permitted to intervene
as a plaintiff (App. 24a).
TABLE OF CONTENTS
Questions presented
Parties to the proceedings
Opinions below
Jurisdiction
Statutory provisions involved
Statement
Reasons for granting the petition
Conclusion
OPINIONS BELOW
The opinion of the court of appeals dismissing the Secretary's
appeal (App. 56a-62a /1/ ) is unreported. The March 26, 1984, order
of the district court that was the subject of that appeal (App.
41a-43a) is unreported. The other orders of the district court.
(App. 1a-5a, 8a-22a, 23a-40a, 44a-47a, 48a-55a) are also unreported.
JURISDICTION
The order of the court of appeals dismissing the Secretary's appeal
was entered on January 5, 1987 (App. 56a), and the Secretary's
petition for rehearing was denied on June 19, 1987 (App. 73a-74a).
The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).
In addition to filing this petition for a writ of certiorari, the
Secretary has taken a direct appeal to this Court under the first
paragraph of 28 U.S.C. 1252 from the April 10, 1987, order of the
district court in this same case. /2/ The notice of appeal to this
Court from the district court's April 10, 1987, order was filed on May
8, 1987 (App. 6a-7a), and the jurisdictional statement was filed on
August 6, 1987. Bowen v. Jordan, No. 87- * * *.
Under the second paragraph of 28 U.S.C. 1252, once a notice of
direct appeal to this Court has been filed, "(a))) appeals or cross
appeals taken to other courts prior to such notice shall be treated as
taken directly to the Supreme Court." This provision brings "the
entire case" to this Court so that constitutional issues may be
avoided if possible. United States v. Locke, 471 U.S. 84, 92 (1985).
The Secretary's appeal to the Tenth Circuit, at issue in the instant
certiorari petition, was taken prior to the filing of the notice of
direct appeal to this Court on May 8, 1987, and that appeal was still
pending in the court of appeals, on the Secretary's petition for
rehearing, when the notice of direct appeal was filed. It may be,
therefore, that under the second paragraph of 28 U.S.C. 1252 the
Secretary's appeal to the Tenth Circuit should "be treated as having
been taken to the Supreme Court" and that the proceedings in the Tenth
Circuit should be deemed to have been transferred to this Court as of
the filing of the notice of direct appeal on May 8, 1987.
If this view of 28 U.S.C.1252 is correct, the issues raised in this
certiorari petition are already before this Court by virtue of the
transfer of proceedings by operation of law under the second paragraph
of 28 U.S.C. 1252. For the same reason, the Tenth Circuit would have
been without jurisdiction after May 8, 1987, to act on the Secretary's
pending rehearing petition, so that the June 19, 1987, order denying
that rehearing petition (App. 73a-74a) would be void. The instant
proceedings would presumably be treated as pending before this Court
on the Secretary's petition for rehearing. If so, then this petition
for a writ of certiorari is unnecessary.
STATUTORY PROVISIONS INVOLVED
Sections 205(j) and 1631(a)(2) of the Social Security Act, as
codified at 42 U.S.C. (Supp. III) 405(j) and 1383(a)(2), are
reproduced at App. 76a-80a.
QUESTIONS PRESENTED
Under the Social Security Act, the Secretary of Health and Human
Services may provide that benefits due a beneficiary who is a minor
child or an incapacitated adult may be paid on his behalf to a
relative or other person (a "representative payee"). In this
nationwide class action challenging the constitutionality of
procedures used by the Secretary in making such payments, the district
court granted nationwide injunctive relief ordering the Secretary, on
due process grounds, to establish certain accounting procedures,
including a requirement that all representative payees file an annual
accounting with the Secretary. While the Secretary's appeal from that
order was pending, Congress addressed the issue in this case and
established a general annual accounting requirement, while exempting
certain representative payees from that requirement. Social Security
Disability Benefits Reform Act of 1984, Pub, L. No. 98-460, Section
16, 98 Stat. 1809-1811, 42 U.S.C. (Supp. III) 405(j), 1383(a)(2). Two
questions are presented.
1. Whether the court of appeals properly dismissed the Secretary's
appeal on the ground that the Secretary had abandoned his challenge to
the district court's order, where the Secretary argued on appeal that
the order should be reversed because the intervening Act of Congress
establishing new accounting requirements was constitutional and
controlling.
2. Whether Congress's 1984 exemption of certain representative
payees from the annual accounting requirement is constitutional.
STATEMENT
As we have explained, under the heading "Jurisdiction" (pages 2-3,
supra), this petition for a writ of certiorari is related to a direct
appeal that the Secretary has taken to this Court from an order of the
United States District Court for the Western District of Oklahoma.
Bowen v. Jordan, No. 87- * * *. In the jurisdictional statement filed
on that appeal (at 2-15), we have thoroughly explained the statutory
and regulatory framework and the proceedings in this case, both in
district court and in the court of appeals. Rather than repeating
that discussion here, we shall summarize those proceedings only
insofar as they are directly relevant to this petition.
1. This is a nationwide class action that was filed in the United
States District Court for the Western District of Oklahoma in 1979 to
challenge certain procedures used by the Secretary of Health and Human
Services when he determines that a particular beneficiary's Social
Security benefits should be paid to a "representative payee" on behalf
of the beneficiary. Such an arrangement is used where the beneficiary
is a minor child or is an adult who has a mental or physical condition
that prevents him from adequately managing his own affairs. The
authority for the Secretary to pay benefits to a representative payee
is conferred by Sections 205(j)(1) and 1631(a)(2)(A) of the Social
Security Act, 42 U.S.C. (Supp. III) 405(j)(1) and 1383(a)(2)(A).
In an order entered on March 17, 1983 (App. 23a-40a), the district
court held that individuals whose Social Security benefits are paid to
a representative payee have a right under the Due Process Clause of
the Fifth Amendment to have the payee submit to the Secretary a
periodic accounting of his expenditure of those benefits (App.
34a-37a). The district court therefore directed the Secretary "to
implement appropriate mandatory periodic accounting procedures within
one year from the date of this Order" (App. 371). The Social Security
Administration (SSA) responded by formulating a plan under which all
representative payees would be notified that they must maintain
records regarding the use of payments, but an actual report would be
required of only a random sample of 10% of the representative payees
each year (App. 42a, 58a). In a brief order dated March 26, 1984, the
district court (i) found that the Secretary's proposal was inadequate
and (ii) ordered the Secretary to require accounting by all
representative payees on an annual basis (App. 41a-43a). /3/
2. The Secretary filed a notice of appeal from the district court's
March 24, 1984, order. Before that appeal was briefed and argued,
Congress enacted the Social Security Disability Benefits Reform Act of
1984, Pub. L. No 98-460, 98 Stat. 1794. In Section 16 of that Act,
Congress generally directed the Secretary to require representative
payees to report at least annually on the use of the benefit payments
they received; Congress also required the Secretary to review a
sample of those reports in order to identify instances of possible
misuse. See 42 U.S.C. (Supp. III) 405(j)(3)(A), 1383(a)(2)(C)(i).
Congress expressly excluded from this annual accounting requirement,
however, those representative payees who are the parent or spouse of
the beneficiary and live in the same household as the beneficiary. 42
U.S.C. (Supp. III) 405(j)(3)(B), 1383(a)(2)(C)(ii). /4/ The
legislative history of the 1984 Act demonstrates that Congress enacted
this exemption specifically because it disagreed with the district
court's March 26, 1984, order in this case. See J.S. 9-10. Congress
determined that "it is neither necessary nor appropriate to require
governmental supervision or detailed accounting in the case of close
familial relationships (parent and child or spouses living toghether)
absent some allegation or overt reason to suspect the possibility of
misuse of funds." S. Rep. 98-466, 98th Cong., 2d Sess. 29 (1984).
e. After the 1984 Act was passed, the Secretary filed a motion with
the district court for an "indicative ruling" and for relief from
judgment under Fed. R. Civ. P. 60(b). The Secretary contended that
the new statutory procedures afforded a constitutionally adequate
system of monitoring, so that the universal accounting requirement
imposed by the district court's order should be set aside. The court
ruled on that motion on January 18, 1985 (App. 48a-55a).
The district court first held that, because the case was then
pending on appeal to the Tenth Circuit, it was "without jurisdiction
to rule on a motion for relief from judgment pursuant to Rule 60(b)"
(App. 48a; see also id. at 51a, 55a). The court nevertheless went on
to state that it would "grant defendant's motion for an indicative
ruling and advise the parties that were such a motion (for relief from
judgment under Rule 60(b)) presented, it would be denied" (App. 48a).
The court explained that it still was the view that the Due Process
Clause requires periodic annual accounting by all representative
payees, notwithstanding Congress's contrary judgment (id. at 54a);
therefore, the court concluded, "it could not grant a Rule 60(b)
motion were such motion presented" (id. at 55a).
Because the district court stated that it did not have jurisdiction
to rule on a motion for relief from judgment under Rule 60(b), and
therefore proceeded as if a Rule 60(b) motion had not actually been
presented, the Secretary did not take an appeal from the January 18,
1985, order insofar as it purported to give only an "indicative
ruling."
4. The Secretary did seek to have the Tenth Circuit address the
constitutionality of the 1984 Act in its consideration of the appeal
that was still pending before the Tenth Circuit, which, in fact, had
not yet been briefed. In the March 26, 1984, order that was the
subject of that appeal, the district court had (i) rejected the
Secretary's proposal for reporting by a 10% sample of beneficiaries
and (ii) ordered the Secretary to require annual reporting by all
representative payees (App. 42a-43a). The Secretary did not raise the
first issue on appeal, because the proposal for accounting by 10% of
representative payees was inconsistent with the superseding
requirement under the 1984 Act that all representative payees make an
annual accounting, subject to the specified exceptions. The Secretary
did challenge the second aspect of the district court's ruling,
arguing that the court of appeals was required to apply the
intervening change in the law and to exclude from mandatory annual
accounting the representative payees who were excluded by the 1984 Act
-- parents and spouses living with the beneficiary and state and
federal institutions in which the beneficiary resides. See Sec'y C.A.
Br. 17, citing, inter alia, Bradley v. Richmond School Board, 416 U.S.
696, 714 (1974). The Secretary accordingly informed the court (C.A.
Br. 14): "Since there is now a statutorily-required accounting
program, * * * the only issue on appeal now is whether Congress's
decision to exempt certain payees from the accounting program
satisfies the requirements of due process." The remainder of the
Secretary's brief was devoted to a defense of the constitutionality of
Congress's exemption from the annual accounting requirement of parents
and spouses living with the beneficiary (C.A. Br. 17-28).
On January 5, 1987, the court of appeals dismissed the Secretary's
appeal (App. 56a-62a). Although the March 26, 1984, district court
order that was the subject of that appeal required annual accounting
by all representative payees, and although the Secretary's argument on
appeal defended the intervening Act of Congress that provided for
annual accounting by fewer than all payees, the court of appeals
concluded that the Secretary had "abandoned any challenge to the order
from which the appeal is taken" (id. at 61a). The court apparently
believed that the Secretary could challenge that order only by arguing
that the 10%-sample plan he originally proposed was consistent with
due process, even though that proposal had since been superseded by
the 1984 Act (id. at 60a-61a).
The court of appeals also reasoned that the constitutionality of
the 1984 Act could not properly be considered because the Secretary
had declined to take an appeal from the district court's January 18,
1985 order (App. 61a-62a). Although the district court had stated in
that order that it was only granting an "indicative ruling" and that
it was "without jurisdiction to rule on a motion for relief from
judgment" (App. 48a), the court of appeals held that, under its prior
decision in Aune v. Reynders, 344 F.2d 835 (10th Cir. 1965), the
district court in fact did have jurisdiction to deny a motion for
relief from judgment while an appeal was pending (App. 61a-62a). The
court of appeals acknowledged that the language of the district
court's January 18, 1985, order was ambiguous and did not "comport
precisely" with the pertinent ruling of Aune (App. 61a-62a). The
court believed, however, that the district court's order had the
"effect" of denying the Secretary any relief from judgment. Because
the Secretary had not appealed the January 18, 1985, order, the court
of appeals declined to pass on that order (id. at 62a).
5. The Secretary filed a timely petition for rehearing of the court
of appeals' dismissal of the appeal. In addition, since the court of
appeals had made clear that the district court would have jurisdiction
to deny a motion for relief from judgment, even while the Secretary's
appeal was still pending in the court of appeals, the Secretary filed
a new motion for relief from the district court's March 26, 1984,
order that imposed an annual accounting requirement on all
representative payees. In that way, the Secretary sought to ensure
the availability of some avenue for appellate consideration of the
important question of the constitutionality of the 1984 Act -- if not
in the Tenth Circuit, then in a direct appeal to this Court from a
district court order denying the motion for relief from judgment.
That order is the subject of the direct appeal that was docketed in
this Court on August 6, 1987.
The court of appeals denied the Secretary's petition for rehearing
on June 19, 1987 (App. 73a-74a).
REASONS FOR GRANTING THE PETITION
The court of appeals' order dismissing the Secretary's appeal in
this case is inexplicable. The court of appeals left in place a
nationwide injunction that effectively nullifies the 1984 Act, without
considering the constitutionality of that Act. The 1984 Act was
passed with specific reference to this case. The Secretary vigorously
defended the 1984 Act's exclusions before the court of appeals, and
the validity of those exclusions was properly before the court.
We have explained in our jurisdictional statement on the direct
appeal (at 15-23) that the exclusions from mandatory annual accounting
under the 1984 Act are constitutional. We will not repeat that
discussion, which we incorporate by reference here. We have also
explained (J.S. 23) the inportance of the issue whether an annual
accounting requirement may be judicially imposed on the representative
payees for more than three million beneficiaries for whom Congress, in
a decision made with specific reference to this case, found that an
accounting would be both unnecessary and inappropriate. This petition
is filed to ensure that the issue will not remain unaddressed. If the
Court does not decide the constitutional question on the Secretary's
direct appeal, it should vacate the judgment of the court of appeals
and remand with directions to consider the constitutionality of the
1984 Act.
1. Contrary to the court of appeals' assertion, the Secretary
manifestly had not "abandoned any challenge to the (March 26, 1984)
order from which the appeal (was) taken" (App. 61a). In that order,
the district court had required universal annual accounting by all
representative payees. In his brief on appeal, the Secretary argued
that the order could not stand because the system of
less-than-universal accounting mandated by the 1984 Act was valid and
controlling. The Secretary therefore asserted that the March 26,
1984, order should be set aside. The conclusion to the Secretary's
brief in fact states the point explicitly (C.A. Br. 28 (emphasis
added)): "For the foregoing reasons, the decision of the district
court should be reversed and the statutory scheme held controlling."
The Secretary cannot be held to have "abandoned" the appeal on the
ground that he did not renew on appeal his argument in district court
that a 10%-sample approach should be approved. First, the district
court's refusal to adopt the 10%-sample approach was only one issue
that might have been presented on appeal; the other, and more basic,
issue was whether the district court's requirement of universal
accounting was proper. Although the Secretary did not press the first
issue after the 1984 Act was enacted, the Secretary, as we have just
explained, continued to argue that the district court's requirement of
universal accounting was erroneous. Moreover, Congress had rejected
the 10% solution in the 1984 Act and had thereby foreclosed the
Secretary, if the Act is constitutional, from urging it on appeal.
The 1984 Act thus made defense of the sampling approach unavailable on
appeal. Neither the Act nor anything else, however, led the Secretary
to abandon his challenge to the district court's universal accounting
requirement.
In fact, the 1984 Act, by creating a conflict between the district
court order and an express congressional judgment made with specific
reference to this case, only heightened the importance of appellate
consideration of the validity of the district court order. The
question of the Act's constitutionality was squarely presented to the
court of appeals, because, if the Act was constitutional, then the
district court injunction could not stand. /5/ Under Bradley v.
Richmond School Board, supra, on which the Secretary relied in his
brief on appeal, the court of appeals was obligated to take into
account the intervening change in the law, and either to decide the
constitutionality of the Act or to vacate the district court's March
26, 1984, order and remand to that court with instructions to consider
the constitutional question.
More than the Bradley obligation was at stake in this case. The
district court had entered a nationwide order, apparently permanent in
nature, that bound the Secretary on a prospective basis. The court of
appeals' failure to apply the change in the law wrought by the 1984
Act therefore had the effect of nullifying the Act without any
consideration of its validity. "Judging the constitutionality of an
Act of Congress is properly considered '"the gravest and most delicate
duty that this Court is called upon to perform,"'" and the "duly
enacted and carefully considered decision of a coequal and
representative branch of our Government" is entitled to respect.
Walters v. National Ass'n of Radiation Survivors, 473 U.S. 305, 319
(1985) (quoting Rostker v. Goldberg, 453 U.S. 57, 64 (1981), and
Blodgett v. Holdne, 275 U.S. 142, 148 (1927) (opinion of Holmes, J.)).
Both Congress and the Secretary were entitled to have the 1984 Act's
validity given the full consideration that the court's "delicate duty"
required when the constitutionality of an Act of Congress is at stake.
2. Contrary to the court of appeals' suggestion (App. 61a-62a), the
Secretary's failure to appeal the district court's January 18, 1985,
order in no way diminished the appellate court's obligation to
consider the Secretary's argument that the 1984 Act was constitutional
and required reversal of the district court's March 26, 1984, order.
First, as we have explained, the validity of the 1984 Act and of the
district court order was squarely and properly presented to the court
of appeals in its consideration of the appeal that was already pending
before it. The Secretary asserted that the March 26, 1984, order
should be reversed; and because of the intervening change in the law,
it became necessary for the court of appeals, in ruling on that
contention, to address the constitutionality of the 1984 Act or to
remand the case for the district court to address that issue. That
obligation is not dissolved or in any way reduced by the availability
of an alternative means of raising the same question. Thus, even if
the constitutional question could have been raised on appeal from the
January 1984 district court order, the fact remains that the court of
appeals was already required to consider the issue on appeal from the
March 26, 1984, order.
Second, the Secretary committed no procedural default in failing to
appeal from the January 18, 1985, ruling. The district court held
(even if erroneously under Aune v. Reynders, supra /6/ ) that it did
not have jurisdiction to deny or to entertain, let alone to grant, a
Rule 60(b) motion by the Secretary; the court merely indicated how it
would rule if presented with such a motion (App. 48a, 51a, 55a).
Thus, the January 1985 order was not a ruling on the merits of the
Secretary's defense of the controlling effect and constitutionality of
the 1984 Act. The Secretary's failure to appeal from the order,
therefore, cannot constitute an abandonment of any challenge to such a
ruling. Although the district court may have erred in believing it
lacked jurisdiction, the Secretary could and did reasonably take the
order at face value, as merely a jurisdictional ruling that did not
warrant an appeal.
3. In any event, the court of appeals' ruling concerning procedural
rules governing Rule 60(b) motions provided no basis for its
conclusion that the Secretary had abandoned his challenge or for its
refusal to consider the merits. In this setting, "a litigant, who in
good faith initiates a timely procedure for relief, should not be
penalized for choice of the 'wrong' procedure" (7 J. Moore & J. Lucas,
Moore's Federal Practice Paragraph 60.30 (2), at 60-338 (2d ed.1985)).
This is especially so where the validity of an Act of Congress is at
issue. Congress made a deliberate decision contrary to the district
court's injunction; yet the court of appeals left that injunction in
place, thus effectively nullifying an Act of Congress, without
considering the validity of the Act. The burden is on those who
attack the constitutionality of an Act of Congress and the factual
assumptions on which it is based (Vance v. Bradley, 440 U.S. 93,
109-112 (1979)), and courts must show deference to Congress's good
faith judgments regarding the adequacy of procedural protections. See
e.g., Walters v. National Ass'n of Radiation Survivors, 473 U.S. 188,
200 (1982). The court of appeals, in refusing to review the district
court injunction, abandoned those principles all the more completely
than if it had erred, for example, inallocating the burden of proof.
4. Although the court of appeals dismissed the Secretary's appeal
on essentially procedural grounds, the effect of the dismissal is such
as to raise issues warranting this Court's review. For the reasons we
set forth in our jurisdictional statement in No. 87- * * *, the
underlying question of the constitutionality of the 1984 Act plainly
merits this Court's consideration. We suggest that that may best be
assured by granting this petition and consolidating the case for
briefing and argument with the related appeal.
CONCLUSION
The petition should be granted and the case consolidated with the
appeal in No. 87- * * *.
Respectfully submitted.
CHARLES FRIED
Solicitor General
RICHARD K. WILLARD
Assistant Attorney General
ALBERT G. LAUBER, JR.
Deputy Solicitor General
EDWIN S. KNEEDLER
Assistant to the Solicitor General
CHRISTINE R. WHITTAKER
Attorney
AUGUST 1987
/1/ "App." refers to the separately-bound consolidated appendix to
this petition for a writ of certiorari and to the jurisdictional
statement in Bowen v. Jordan, No. 87 * * *, in which we have taken a
direct appeal to this Court under 28 U.S.C. 1252 from a related order
of the district court.
/2/ In the April 10, 1987 order (App.1a-5a), the district court
denied the Secretary's motion for relief from the same order, dated
March 26, 1984 (App. 41a-43a), that was before the Tenth Circuit here.
In denying the motion, the district court held unconstitutional
certain provisions of Section 16 of the Social Security Disability
Benefits Reform Act of 1984, Pub. L. No. 98-460, 98 Stat. 1809-1811,
which was enacted after the district court entered its March 26, 1984,
order.
/3/ On July 2, 1984, the district court granted the Secretary's
motion to amend the March 26, 1984, order to exclude from the annual
accounting requirement any federal and state facilities for the
mentally ill or retarded that serve as representative payees (App.
44a-47a).
/4/ For those payees, the Secretary must require the parent or
spouse to verify on a periodic basis that he continues to live in the
same household as the beneficiary. 42 U.S.C. (Supp. III)
405(j)(3)(B), 1383(a)(2)(C)(ii).
The 1984 Act also exempts federal and state institutuions serving
as payees from the annual accounting requirement. 42 U.S.C. (Supp.
III) 405(j)(3)(C) and (D), 1383(a)(2)(C)(iii) and (iv).
/5/ Section 16(d) of the 1984 Act specifically provided that "(t)he
amendments made by this section" -- which included both the mandatory
annual accounting requirement and the exemptions from that requirement
for co-resident parents and spouses and for institutions -- "shall
become effective on the date of the enactment of this Act" (98 Stat.
1811 (emphasis added)). Congress, whose intention with respect to the
application of the provisions it enacted is controlling, thus
unambiguously required the court of appeals to consider the
superseding statutory accounting provisions with respect to any claim
to an accounting after October 9, 1984, the effective date of the Act
(ibid.).
/6/ The law in the Tenth Circuit has been somewhat less clear than
the court of appeals' opinion suggests. Compare 7 J. Moore & J.
Lucas, Moore's Federal Practice Paragraph 60.30(2), at 60-333 (1985)
(citing Tenth Circuit as among circuits that have required appellate
permission for a district court even to entertain a Rule 60(b) motion
while the case is on appeal), with id. at 60-335, 60-336 & n.19
(citing Aune as a decision allowing district court denial of a Rule
60(b) motion while the case in on appeal).